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April 16, 2009

Compromise For US Government Health Plan ‘Within Reach’

by Sam Savage

The top health care adviser for the Obama administration said on Wednesday that a compromise is within reach on a government health plan for the middle class that wouldn't drive private insurers out of business, the Associated Press reported.

One of the most contentious issues in the debate over overhauling health care to cover the uninsured and curb costs has been the option of providing government coverage to workers and their families.

But conservatives and businesses fear that Obama's proposed public plan could open the door for a government takeover of the system.

A public plan could be designed to address concerns about the federal government overreaching in its role, according to Nancy-Ann DeParle, director of the White House health reform office.

DeParle said she was very hopeful they would be able to reach an agreement on the issue.

She suggested there are ways of bridging the gap over any policy disagreements.

One example would be a public plan that could pay hospitals and doctors rates that are similar to what private insurers pay. This would address any fears that government would use its power to dictate low rates that private plans can't compete with.

DeParle said such a plan could still cut costs because it wouldn't have to turn a profit and it would also save on administrative costs.

However, ideological objections to government's role would be hard to overcome, she acknowledged.

The government already pays nearly half of the nation's health care tab, considering government funded programs cover seniors, poor families, and many children. The Obama administration has proposed to expand that even more.

The Obama plan, through a new kind of purchasing pool, would offer middle class workers and their families the option of enrolling in a public plan, along with private insurance.

DeParle said the President wanted a mechanism to lower costs and keep the private sector honest, although he has avoided filling in the details in order to give himself some room to compromise.

However, a recent economic study by The Lewin Group, a consulting firm, cited that those details would be critical. It found that a public plan would help to significantly reduce the number of uninsured. But it could also take away much of the business from private insurers, depending on how it's designed.

The study found that a public plan open to all employers and individuals, and paying the same as Medicare, would become the dominant insurer in the country.

But its impact would be limited if the plan were open only to individuals and small businesses, and paid rates similar to private insurers.

That would mean the public plan would mainly be helping groups that now have a hard time getting private coverage.

But many in the insurance industry are skeptical.

The Lewin Group is a subsidiary of UnitedHealthcare, the nation's largest health insurer. But the firm claims it makes its own judgments, and groups on all sides of the health care debate use its work.